Recent Deals Highlight Threat to CMO Supply Base

Uncertainty is creeping into the supply of contract injectables manufacturing capacity as bio/pharmaceutical companies continue to buy up CMOs. With biopharmaceuticals approaching 50% of the expanding new product pipeline, biopharma companies may be facing challenges in arranging for launch capacity.

Two deals have been announced in the past month that continue the trend of CMOs being acquired by product companies. The largest and most significant is Pfizer’s planned acquisition of Hospira, whose One2One contract manufacturing business is one of the five largest injectables CMOs. In a less significant development, Italian CMO Sirton Pharmaceuticals SpA has been acquired by China-based biopharmaceutical company 3SBio.

As a practical matter, the Sirton acquisition has little significance for injectable CMO supply/demand balance because of its limited market scope, but it is part of a broader trend over the past 18 months of acquisitions involving injectables manufacturers that have been participating in the CMO industry. With the exception of Hospira and, to a lesser extent, JHP (now known as Par Sterile Products Manufacturing Services), most of the acquired companies have been marginal players in the broader injectables CMO industry and in particular, have not been factors in manufacturing of high-value products like biologics.

The Hospira acquisition, however, potentially roils the injectables CMO industry because of…

This article is reprinted from the February 2015 issue of Bio/Pharmaceutical Outsourcing Report. To learn more, click here.

Lisa serves as the Managing Editor at PharmSource. She holds a BS degree in journalism from Radford University, and has over 20 years of experience in editing, writing and managing newsletters and other print media, including B2B publications related to industries including science, pharmaceuticals, biologics and medical devices.